BHP, Reuters, EMI Lead European Gainers

Elena
04 May, 2007
New York City

European stock markets posted solid gains on Friday, hitting fresh six-year highs on the back of deal speculation in the media and mining sectors. BHP Billiton, rose 4.6% and Rio Tinto climbed 4.7% amid reports that private-equity investors could buy BHP. Among media stocks, Reuters surged 25% after the company said it received a takeover approach, possibly from Thomson Corp. Music-publishing group EMI jumped 8.2%. The FTSE 100 rose 1%, the French CAC 40 rose 1.1%, the German DAX 30 added 0.5%.

[R]1:00PM NY, 5:00 PM Frankfurt European stocks closed higher, helped by media and mining stocks.[/R]
European stock markets posted solid gains on Friday, hitting fresh six-year highs on the back of deal speculation in the media and mining sectors. BHP Billiton, rose 4.6% and Rio Tinto climbed 4.7% amid reports that private-equity investors could buy the world''s top mining firm, BHP.

Among media stocks, Reuters surged 25% after the company disclosed that it received a takeover approach, possibly from Thomson Corp. Shares of music-publishing group EMI jumped 8.2% after it said it received a number of preliminary approaches to acquire the group. Altadis climbed 3.7% after CVC and PAI Partners tabled a 12.8 billion euro, or 50 euros a share, offer for the Franco-Spanish cigarette maker, outbidding Imperial Tobacco.

Auto makers also provided support, with shares of BMW rising 3.5%, as Societe Generale upped BMW''s rating to buy from hold. The FTSE 100 rose 1% at 6,603.70 and the French CAC 40, ahead of the weekend presidential elections, rose 1.1% at 6,068.83. The German DAX 30 added 0.5%.


[R]11:30AM U.S. stock averages traded higher, driven by takeover news.[/R]
U.S. stock market averages posted gains for a fourth session in a row, with the Dow hitting a fresh high of 13,284.53 topping its previous high of 13,256.33 reached Wednesday. The positive market sentiment was generated by corporate takeover news and employment figures. Yahoo ((YHOO)) climbed 18% amid speculations that Microsoft ((MSFT)) is interested in merger talks with the Internet search engine. Further in M&A action, Reuters ((RTRSY)) surged 25% after news it was approached by an unidentified party.

In other deal news, Spanish-French tobacco company Altadis said that it received a preliminary private equity takeover approach from CVC and PAI Partners, valuing Altadis at around 12.8 billion euros ($17.4 billion).

Among notable movers to the upside, options-trading firm Interactive Brokers Group Inc. ((IBKR)) gained 9% after raising $1.2 billion in its stock market debut Friday as the richest IPO in 2007. Interactive Brokers Group priced 40 million shares at $30.01 each, coming in at the high end of the expected range of $27 to $31 a share, and the size of the offering was boosted from 34.5 million shares earlier in the week.

By sector, considerable strength is visible among airline stocks, which is benefit from a decline by the price of oil. Internet, defense, and brokerage stocks are other notable advancers. In late morning trading, the Dow Jones industrial average rose 33.37, or 0.24%, to 13,272.75. The Standard & Poor''s 500 index advanced 5.32, or 0.35%, to 1,507.71. The Nasdaq composite index rose 9.43, or 0.37%, to 2,574.89. Bonds rose following the jobs data; the yield on the benchmark 10-year Treasury note fell to 4.64% from 4.65% late Thursday.


[R]9:45AM U.S. markets opened higher, boosted by merger activity.[/R]
Corporate takeover news and in-line-with-estimates unemployment rate boosted U.S. stocks at opening. Yahoo ((YHOO)) jumped 15% in early trading amid reports that Microsoft is interested in buying the Internet search engine in a deal that could be worth as much as $50 billion. At the same time, Dow member Microsoft ((MSFT)) lost 1.7%. In other deal news, Reuters ((RTRSY)) surged 25% after it said it had received a preliminary takeover approach from financial data provider Thomson Corp.

Among earnings-related movers, Eastman Kodak ((EK)) dropped 5.5% after it reported a Q1 loss of 53 cents a share, missing forecast of a loss of 2 cents a share. It also lowered its forecast of digital earnings from operations by $50 million. Starbucks ((SBUX)) dropped 1.7% after posting earnings in line with analyst forecasts, and announced plans to buy back an additional 25 million shares.

Elsewhere, Schering-Plough ((SGP)) rose 1.7% after it was upgraded to overweight from neutral at Prudential Equity Group. In early trading, the Dow Jones industrial average rose 4.30, or 0.03%, to 13,245.68. The Standard & Poor''s 500 index rose 2.74, or 0.18%, to 1,505.13. The Nasdaq composite index rose 4.17, or 0.16%, to 2,569.63. Bonds rose following the jobs data; the yield on the benchmark 10-year Treasury note fell to 4.65% from 4.65% late Thursday.

[R]Employment growth slowed to 88,000 in April.[/R]
Friday morning, the Department of Labor released its highly anticipated report on employment in the month of April, showing that job growth in the month came in somewhat below what economists had been expecting. The report showed that the U.S. economy added 88,000 jobs in April following a downwardly revised increase of 177,000 jobs in March. Economists had expected an increase of 100,000 jobs compared to the increase of 180,000 jobs originally reported for the previous month. The Labor Department said that job gains continued in several service-providing industries, including health care and food services, while employment declined in retail trade and manufacturing.

Service-providing industries added 116,000 jobs in April following an increase of 141,000 jobs in the previous month. The increase more than offset a decrease of 28,000 jobs in goods-producing industries, which compares to an increase of 36,000 jobs in March. The Labor Department also said that the unemployment rate edged up to 4.5 percent in April from 4.4 percent in March. The modest increase by the unemployment rate came in line with economist estimates. Additionally, the report showed that average hourly earnings edged up by $0.04 or 0.2 percent to a seasonally adjusted $17.25. At the same time, average weekly earnings edged down by 0.1 percent to $583.05. On an annual basis, average hourly and weekly earnings grew by 3.7 and 3.4 percent, respectively.


[R]9:30AM UK benchmark index surged Friday on bid talk about Reuters.[/R]

The UK market rallied Friday. The FTSE 100 gained 59.5 points or 0.9% to 6,597.3 by mid-day.

Advancers

Reuters advanced 25% as the financial information group announced it has received an approach, supposedly by Thomson Corp of Canada or News Corp. Other media group shares rose including Pearson and Daily Mail & General Trust after the second large media approach this week.

Miners surged as strong metal prices buoyed the sector. Rio Tinto advanced 3.6%, BHP Billiton gained 2.8% and Lonmin, which posted strong first-half numbers on Wednesday, gained 2.8%.

Shares in building materials group Hanson advanced 3.9% on news that biggest cement maker in Germany, HeidelbergCement, is mulling a bid for the group.

EMI Group led mid-cap advancers, up 7.6% on confirmation that it had received a number of takeover approaches.

Decliners

BG Group shed 1.3 % after it posted a 20% drop in first-quarter earnings. Soco International, the Vietnam-focused oil explorer, declined 5.4% after it announced the Te Giac Cam well, the first well on Prospect S in Block 16-1, would be plugged and abandoned.

Premier Oil, also preforms poorly, as it announced it was to abandon its Gajah Sumatera-1 exploration well in Natuna Sea Block A. Shares in the company fell 0.4%.


[R]9:00AM U.S. stock futures traded higher on jobs report.[/R]
U.S. stock futures advanced Friday, lifted by moderately slowing jobs growth and deal speculation that Microsoft Corp. is planning to launch a $50 billion bid for Yahoo. The Labor Department said that U.S. job growth slowed to 88,000 in April, vs. the average economist estimate of 100,000. The unemployment rate gained 4.5% from 4.4%, in line with expectations.

Among pre-market highlights, Yahoo ((YHOO)) jumped 16% in pre-open trading amid reports that Microsoft ((MSFT)) requested formal talks over a bid that could be worth as much as $50 billion. Further in deal news, Reuters ((RTRSY)) said it had received a preliminary takeover approach without saying who had made it. Company''s stock soared 26% in the pre-open.

On the earnings news front, Eastman Kodak Co. ((EK)) posted a narrower Q1 loss, due to a transition from film into digital products. The photography company lost $151 million, or 53 cents a share vs. a loss of $298 million, or $1.04 a share a year ago, missing estimates of a loss of $3.8 million, or 2 cents a share, on sales of $2.1 billion. The company posted 8% sales drop to $2.12 billion from $2.89 billion a year ago. The stock fell 2.2% in the pre-open.

Starbucks ((SBUX))reported late Thursday earnings of 19 cents a share, meeting analyst forecasts, and said it plans to buy back an additional 25 million shares. Among companies driven by analyst comments, Schering-Plough ((SGP)) added 1% after its stock was upgraded to overweight from neutral at Prudential Equity Group. Futures in the technology-laden Nasdaq 100 hiked up 11.50 points to 1,918.00 points and S&P 500 futures climbed 6.40 points to 1,514.70. Dow industrials futures ran up 50 points to 13,328.


[R]8:30AM Asian market closed mostly higher with HK, Australia leading gainers.[/R]

Asian markets finished mostly higher. Markets in Japan and China were closed for public holidays. In Hong Kong, the benchmark Hang Seng Index gained 159.50 points, or 0.8%, to 20,841.08.

Henderson Land rallied 6.8% after gaining 7% Thursday, fueling its advance to overcome Hang Lung Properties as the third-largest developer in terms of market capitalization in the city. Other property stocks also gained. Cheung Kong advanced 2.9%, Sun Hung Kai Properties rose 1.8% and Sino Land finished 4.7% higher.

In Australia, the benchmark S&P/ASX200 index rose 59.3 points, or 1%, to a record 6,304.9. BHP Billiton, the largest miner in the world, gained 2.4%, while Rio Tinto surged 4.6%. Also on Friday, the Reserve Bank of Australia decreased its inflation forecast for the rest of 2007 from 2.75% to 2.5% on stable oil prices and a higher exchange rate.

The Korea Composite Stock Price Index, or Kospi, in South Korea, ended up 7.88 points, or 0.5%, at 1,567.74. Kia Motors, which posted an unexpected first-quarter loss during the session, ended up 0.5%.

Taiwan shares surged on optimism about robust quarterly earnings. The Weighted Price Index of the Taiwan Stock Exchange gained 133.11 points, or 1.7%, to close at 8,059.77.


[R]8:15AM Yahoo surged 15% on possible $50 billion offer from Microsoft[/R]
Shares of Yahoo ((YHOO)) surged 15% in pre-open trading on Friday amid reports that Microsoft ((MSFT)) is likely to launch a buyout bid for the Internet search firm after being beaten to other deals by Google Inc. ((GOOG)). The deal could be valued at a $50 billion.

Microsoft is reportedly intensifying its pursuit of Yahoo and has requested formal talks. Recently, Google acquired DoubleClick for $3.1 billion. According to the report, a potential deal between Microsoft and Yahoo would lift their combined share of the search advertising market to 27% against Google''s 65%. Shares of Microsoft slipped 0.9% ahead of opening bell.


[R]8:00AM NY-7:00PM Mumbai Sensex ends lower Friday on weakness in Reliance Industries.[/R]

The Sensex on BSE finished 142.94 points, or 1.02%, lower at 13,934.27.

The market-breadth was negative as there were almost three decliners for every two advancers. As 1,453 stocks declined, 1,130 advanced and only 84 stocks remained unchanged. Of the 30 stocks in the Sensex, nine advanced, while the rest declined. The turnover on BSE was Rs 4,246 crore, slightly lower than Rs 4,432.11 crore on Thursday. On NSE, the turnover was Rs 9,399.66 crore, almost unchanged from Rs 9,326.83 crore on Thursday.

Economic news

The wholesale price index decreased to 5.77% for the week ended April 21, lower than 6.09% the previous week. Finance Minister P Chidambaram announced that the government will work on policy measures and will increase food and commodities supply to bring down inflation to 4.5%.

The Central Government floated on Monday a tender to import one million tons of wheat to hedge against possible expensive grain imports at a later date.

The government recast the tax on Employee Stock Options. The Fringe Benefit Tax will now apply on the date of the option award. The Fringe Benefit Tax would be enforced on the difference between the fair market value on the date on which the option is conferred and the amount actually paid by the employee for the shares.

Trading highlights

Indiabulls was the most-active stock with a turnover of Rs 377.30 crore followed by Reliance and IFCI.

Advancers

Cipla surged 2.7% to Rs 217. The stock had slumped 14.2% to Rs 217.10 in a single trading session on April 27 2007, on missing earnings estimates for the fourth quarter fiscal 2007.

Hindalco gained 1.5% to Rs 148. Hindalco net profit surged 15% in the fourth quarter of fiscal 2007 to Rs 721 crore from Rs 626.30 crore in the comparable period a year earlier. The results were released in mid-afternoon trade.

ACC advanced 0.8% to Rs 859, off an early high of Rs 880.20, bucking the downtrend in cement stocks.

Decliners

HDFC shed 2.7% to Rs 1,634. During the session on Thursday, HDFC had posted 28.96% growth in net profit in the fourth quarter of fiscal 2007 to Rs 550.05 crore as against Rs 426.52 crore in the previous quarter a year earlier.

Index heavy Reliance Industries and Larsen & Toubro declined 2.5% each to Rs 1,583 and Rs 1,698, respectively. Reliance Industries plunged on reports that the Reliance Natural Resources had secured an interim stay from the Bombay High Court, preventing Reliance Industries from selling 40 million standard cubic meters per day of gas. The interim order restrains Reliance Industries from selling the gas to any third party or using it for captive consumption.

IT large-caps declined as the rupee shot up against the U.S. dollar. Satyam Computer was down 1.7% to Rs 471, TCS shed 1.2% to Rs 1,274, Wipro slipped 0.4% to Rs 568 and Infosys dipped 0.2% to Rs 2,076. Other decliners included Bharti Airtel and ICICI Bank off 2% each to Rs 818 and Rs 855, respectively. BHEL slid 1.6% to Rs 2,497.

Most cement stocks ended in negative territory. Grasim shed 0.9% to Rs 2,470, off the early high of Rs 2,565, while Gujarat Ambuja Cements lost 1.1% to Rs 120. The government on Thursday withdrew higher fixed duty on cement manufacturing proposed in the Union Budget, and instead levied 12% duty on 50 kg bags costing more than Rs 190 a piece.


[R]6:30AM European markets advance Friday on bid talk in Reuters and EMI.[/R]
European markets advanced in mid-morning trade on Friday. The major indices were higher including the FTSE 100 which rose 0.3% at 6,560.00 and the French CAC 40, which also gained 0.2% at 6,015.21, while the German DAX 30 was a bit worse, trading flat at 7,476.56. National benchmarks advanced in 13 of the 16 western European markets that were open.

Advancers

Reuters soared 30% after it said it received a preliminary takeover approach from an unidentified suitor. The board of Reuters confirms the preliminary approach from a third party which may or may not lead to an offer being made for Reuters.

Music publishing group EMI rallied 9.2% after saying on Friday that it has received a number of preliminary approaches to acquire the group. The firm announced there can be no certainty that any of the approaches will results in an offer.

U.K. building materials group Hanson surged 5%, extending a 20% advance on Thursday when HeidelbergCement announced it was mulling over a takeover approach. Goldman Sachs upgraded Hanson to neutral from sell after the announcement from the German firm.

Gainers included mining large-caps BHP Billiton up 3%, and Rio Tinto up 3.8%, as U.K. investors priced in a similar move in record-hitting Australian markets. Shares of BMW gained 2.8% just a day after reporting a 38% decline in first-quarter profit.

Decliners

Deutsche Boerse, the operator of the Frankfurt stock exchange, said yesterday first-quarter net income rose 19% to 192.3 million euros. That was less than the 195 million euro median estimate of four analysts surveyed by Bloomberg. The stock fell 0.8%

Shares of Nokia the largest mobile phone maker in the world, dropped 2.4% after it also traded without dividend rights.

Commodities

Crude oil erased earlier gains and declined near $63 a barrel in New York. Crude oil for June delivery shed 16 cents to $63.03 a barrel in after-hours electronic trading on the New York Mercantile Exchange in early trade in London. Brent crude oil for June settlement gained 23 cents to $66.29 a barrel in electronic trading on ICE Futures exchange.

Gold declined, giving up recent gains, as higher equity prices lowered demand for the precious metal as an alternative investment. Silver was little changed. Gold for immediate delivery fell $1.35, or 0.2 percent, to $681 an ounce, while silver was little changed at $13.41 an ounce.

Currencies

The dollar declined against most other major currencies in European trading Friday morning. The euro traded at $1.3559, up from $1.3554 late Thursday in New York. The British pound traded at $1.9861, down from $1.9876. The dollar bought 120.31 Japanese yen, down from 120.44.